The outlook for 2005 is one of 'cautious optimism', with an increased emphasis on issues of compliance, pharmacovigilance, outsourcing, and the pharma CIO. Those were some of the key takeaways of the first annual Life Science Insights (LSI) Predictions for the life sciences industry, delivered today by Jim Golden, the firm's vice-president for research. One of the buzzwords for 2005 is pharmacovigilance. Golden sees a tremendous opportunity for vendors who can combine software, content, and services. He also predicts that "pharmas will fall all over themselves to disclose negative trial data", largely as a marketing ploy.

And so to the LSI top ten list for 2005:

Technology growth later in the value chain: Technology spending will increase relatively more in downstream processes, such as clinical trial management systems, electronic data capture, and electronic lab notebooks.

Disaggregation happens: Big pharma IT divisions are moving away from the 'mother ship' model. "Individual business units are making more and more IT decisions," said Golden. Any vendor with a solution can at least "get their foot in the door".

Innovation will happen -- somewhere else: R&D will increasingly become a target for economies, as pharmas look to outsource discovery programs to China, India, and Singapore. "Can we outsource medicinal chemistry and target discovery?" will be a key question in Golden's mind. There will also be growing emphasis on capturing external innovation, for example in the form of literature mining.

The line between IT and drug discovery will continue to blur: "Computational biology will go away," said Golden, "because most biology will be computational." He said this item could have been subtitled "Genomics doesn't matter." As ageing pharma veterans retire, there will be a warmer reception for in silico prediction tools, although Golden said he still believes drug discovery is more an art than a science.

Thus, the rise of the pharma CIO: This position will have a larger seat at the R&D table. While CIOs managing non-core businesses will be spending more time in Asia, funding sources will increasingly come from both corporate IT and the business unit itself.

Data standards will drive a fragmented industry: Although not required, a growing number of standards including SDTM (study data tabulation model), SAFE (secure access for everyone), and SEBIX (secure electronic biopharmaceutical information exchange) for submitting and managing clinical data will become "de rigueur".

The curse of New York attorney-general Eliot Spitzer: IT organizations are scrambling to comply with a growing list of regulatory mandates and meet deadlines. "Pharma lawsuits by states' attorneys-general will drive a new market for compliance software, and make Sarbanes-Oxley look like a picnic," said Golden. Look for biopharmas to hire a CCO -- chief compliance officer.

Pharmacovigilance: The buzzword for the next few years, thanks to the Vioxx withdrawal and suspicion over other blockbuster drugs. "Pharmacovigilance is a problem of data integration," said Golden, who offered a broad definition that included toxicogenomics, adverse event reporting, and regulatory compliance. "The FDA will want it; regulators will demand it; pharmas, biotechs, and the National Institutes of Health will struggle to build it." The first vendor to offer a comprehensive solution, probably within the next 18 months, will own the space.

Lost on the NIH Roadmap: The 2002 NIH Roadmap, proposed by director Elias Zerhouni, could lead to a dramatic, but welcome, reduction in the number of NIH institutes, with other government agencies looking to fill the void. Golden sees a growing role for venture philanthropists such as the Bill and Melinda Gates Foundation.

Venture capital is back: "The pendulum is slowly swinging back to tools and platforms," Golden said. He asked why VC firms tended only to look at MIT and Stanford. "I'd pitch a tent in Madison, Wisconsin, and probably make a lot of money," said Golden. The successful US$3 billion California embryonic stem cell initiative could bolster Series A financing.